The Harrison Drury Blog

Conquering restrictive covenants

Fence

The law of restrictive covenants is a complex area and a mystery to many landowners, some of whom believe that restrictive covenants cannot be challenged, however, this is not the case.

Restrictive covenants affecting land arise out of an agreement that one party will restrict the use of its land in some way for the benefit of another’s land. The restrictive covenant is capable of being enforceable by one party’s successors in title against the other’s successors in title, as well as between the original contracting parties. Therefore, if your property is subject to a restrictive covenant and you wish to modify or develop it, you may discover that you are prevented from doing so if the covenant remains on the title.

Checking the title deeds to your property will quickly reveal whether there is a valid restrictive covenant which affects the land. If you find that your property is affected by a restrictive covenant, you should firstly consider whether indemnity insurance is available in order to provide you with protection in the event that someone with the benefit of the covenant takes legal action against you for breaching the covenant. If insurance is not available then you should try and identify the owners of the land which benefits from the covenant and try to reach a compromise with them which will usually involve the payment of money for the release of the covenant.  If neither of the above are possible, then an application can be made to the Lands Tribunal seeking an order, which wholly or partially discharges or modifies the restriction.

The most common grounds for the Lands Tribunal agreeing to discharge or modify the restriction are that the restriction is obsolete due to the change in the nature of the neighbourhood since the time it was originally imposed, or that the restriction prevents the reasonable use of the property and modification would not result in those entitled to the benefit of the covenant losing something which provided a practical benefit of substantial value, and, money would be an adequate compensation for any loss suffered.

An application to the Lands Tribunal is a lengthy process sometimes taking in excess of 2 years and can prove to be very costly. Also, the result of an application to the Lands Tribunal is by no means certain, there is a great deal of discretion given to the Lands Tribunal to assess what they believe to be a practical benefit of substantial value.

An applicant will need to instruct an expert to report on whether the person entitled to the covenant would loose any practical benefit of substantial value. It is the expert’s responsibility to calculate any decrease in value which the proposed development might have on the land entitled to the benefit of the restrictive covenant.

Communication and negotiation are key in these situations, it is important to approach those with the benefit of the covenant and try to reach some sort of compromise. Providing them with a copy of the expert report is a good starting point. This may reassure the objector that they have nothing to fear in loosing the benefit of the covenant.  If a compromise cannot be reached in the early stages and an application to the Lands Tribunal is made, negotiations between parties can continue right up to the final moments. Trial should be the absolute last resort for all parties concerned.

Compensation resulting from the removal or modification of a restrictive covenant is based upon the reduction in value of the property that had the benefit of the restrictive covenant.

It is also left to the Lands Tribunal to decide who pays the costs of the proceedings, more often than not the applicant will usually end up paying the costs of those who benefit from the covenant, whatever the outcome.

I welcome anybody who wishes to comment or contribute on this interesting area of law and invite all your questions.

309 Comments

By vh on February 12th, 2017

We lost a recent sale on our home as we apparently have a share with 48 others in a dissolved management company which was set up by the developers as a condition of planning permission with the planning service so he could build.
The developer subsequently failed to file returns and the company was dissolved in 2010. No one was aware there was a management company and residents were never asked to contribute or approached.
Our solicitor did not make us aware of the management company when we purchased the house 11 years ago. Now solicitors won’t accept indemnity insurance to cover the liabilities connected with the non existence of a management company. We dont know what else we can do. We are in the process of applying to the land tribunal to have this restriction removed and they seem happy enough to remove it.
The green areas are outside each house snd residents look after them well and keep place tidy. Apparently the common areas have passed to the crown and there is no agreement for residents to contribute or it may have been possible for another management company to buy the land back from the crown and run a new company which would have sorted the problem. Will i still need indemnity insurance if restrictions removed by land tribunals. The development is made up of houses only all of which are freehold. We have house back on market and several other houses have sold around us in same development. We have told it depends on buyers solicitor and if they accept indemnity insurance. Surely solicitors should all be practicing the same. Help !!

By John Stansfield on March 14th, 2017

Hello could you advise on the following please.I own a motor vehicle garage Title LA680773 that i want to sell to a national supermarket chain to build a small convenience store on.The problem i have is that in 1929 when the farmer sold the plot he put a covenant on it saying it could only be used as a car garage,however 3 years later he sold the rest of the field (15 acres) to the milk marketing board who built a dairy.Around 70 years later they closed the dairy and sold the site to a national hose builder who built 205 houses on it.The covenant is now no longer prevalent or of benefit to anybody as we are not attached to any of the land that had the benefit of it.I have spoken to all the houses that have been built on the 1929 conveyance and out of 205 there are 122 supporting the unenforceability of it by signing a form,25 supporting it verbally and the rest having no interest at all as they are around half a mile away as the crow fly’s.Out of the 205 people spoken to there is only 1 who doesn’t want a shop as they think kids will hang round it but there is a road,a row of houses and a 10 ft steel fence between them and our site.My question is do we apply to land registry and on which form or do we have to go through the court.I would be grateful if you could give me any advise or direction.PS we have the support of the original farm that put the covenant on which obviously has new owners,our local ward councillor and the house builder who owns the freehold for the new houses. Kind Regards John Stansfield

By Angela Fisher on March 25th, 2017

Hello. I have been living in my home for 16 years. My daughter is leaving home soon to go to university. I thought it would be great to rent out my home and then rent another property close by to her university so I can support her when she needs me. However, I believe that in my deeds there is a covenant which states that the property must be owned and occupied by a single family. Does this mean that I cannot rent my property out for a couple of years? I fully plan to come back to this property. Very best regards, Angela

By Andi Saunders on March 26th, 2017

We run a small community group (www.eastleighmensshed.co.uk) from workshops we have build at the bottom of a garden, under a license to occupy. one of the neighbours has now raised a complaint of breach ofa 1928 covenant precluding the use of the land for such “club” uses.
Is this something that can be overturned and would it be expensive?
Kind Regards Andi Saunders

By LP on May 13th, 2018

Hello. 6 years ago we bought a 60s house in a terrace of 5 similar houses. When they were built they were identical. In the 70s the white wooden, single-glazed windows on our house were replaced with dark brown, wood-effect double-glazed UPVC. Since then, all the other houses have replaced their windows with white UPVC though every house has a different arrangement of opening windows, obscured panels and the front doors are now a variety of colours. We recently bought the freehold, hoping to be able to adapt our house, but the ex-freeholder (who still owns the freehold of three of the houses) left in restrictive covenants from the lease so that we have to get his permission to make any changes to the front elevation. We are in a conservation area and got planning permission to replace the (failing and draughty) windows with a very high specification, sustainable, aluminium window system, replacing the dark brown with dark grey. The ex-freeholder has said that he will not give permission unless we make them look like white UPVC to match the (unmatched) neighbours. The windows were already a dark colour, we are replacing dark brown with dark grey, our neighbour welcomes it, all the people overlooking our house have said how much better it will be. What power does he have to enforce this, seeing as he must have given permission for the dark brown in about 1978? We are also not allowed to use the garage as anything but a garage, although it is too small to fit a modern car, nor can we increase the footprint of the building and the loft does not have adequate height to use as a room. It is a very small house; when they were built, children were able to leave home and buy or rent, now we are facing living in a tiny house with adult children who can’t afford to leave home. Is it reasonable to hold us to these restrictions in today’s financial climate? We cannot afford to move to a bigger house. Any advice would be welcomed. With thanks

By Gill Ashcroft on May 24th, 2018

Dear LP

Thank you for your enquiry.

Your comment raises a number of interesting issues, which we would need to explore further with you. We would need to consider all the circumstances giving rise to your query, undertake a review of all relevant documentation, and apply the information gleaned from this review to the appropriate legal provisions to establish whether these covenants remain enforceable. Our findings would be presented in the form of a written report to you, which would set out our advice and identify a strategy to achieve your objectives moving forward on the basis of that advice.

The report would also set out the likely costs you may incur in achieving your objectives, which would enable you to make an informed decision about the strategy to be adopted whilst keeping legal spend within agreed boundaries.

If you do want to go ahead with the report and would like to discuss this further, please do not hesitate to email me on gill.ashcroft@harrison-drury.com and we can set up a call.

Kind regards

Gill

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